New Labour's "knee-jerk approach" to criminal justice over its time in power has left a prison and probation service which is dysfunctional and "in crisis", according to a former chief inspector of prisons.

General Lord Ramsbotham accuses the former government of unleashing a "torrent of hastily and ill-thought through legislation" which has created thousands of new crimes and has demonised young offenders. It has left behind a system which is failing to protect the public, has helped to increase the prison population and has "virtually destroyed" the national probation service, he says, in a foreword to the Prisons Handbook, an annual guide to the penal system of England and Wales, which is due to be published on Thursday.

Ramsbotham's attack comes as the prison population stands at a record high. There are an estimated 85,000 people in jail in England and Wales, the largest prison population per capita in western Europe.

His intervention will put pressure on David Cameron's coalition to overcome policy tensions between the two parties on sentencing and prisons to take immediate action. The new government has promised a review of sentencing policy.

Ramsbotham, a former army officer, acknowledges that Labour inherited a system riddled with problems, but said that instead of a clear strategy "came government on the back of a fag packet, waste of resources and unnecessary crises in services that were crying out for leadership and direction".

Highlighting the rise in reoffending, he poses the question: "Is the public being protected?" before adding: "If reoffending is used as a measure of that, the answer is a resounding no. When New Labour took over in 1997, the reoffending rate for adult male prisoners stood at 55% within two years of release. It now stands at 67%." It had gone up by 12 percentage points over the past 13 years "despite all the money poured into the system, which suggests money wasted elsewhere".

A report by the National Audit Office earlier this year revealed that reoffending by prisoners given sentences of less than 12 months is costing the country up to £10bn a year, and showed how tens of thousands of offenders go in and out of jail with little done to stop them reoffending.

On prison overcrowding, Ramsbotham, who was chief inspector between 1995 and 2001, said: "Far too many prisoners have nothing to do, with the inevitable result that they come out and reoffend. Also, the prisons are full of people who should not be in there for a variety of reasons."

He criticised Labour for virtually destroying the National Probation Service, which has no director, and describes as "crazy" a system in which "according to the Ministry of Justice's own figures [probation officers] can only spend 24% of their time in face to face contact with offenders … this means that they can spend no more than 10 to 15 minutes a week with medium-risk offenders and none with low risk."

The National Offender Management Service, the new body that covers prisons and probation, he describes as a "monster bureaucracy".

Ramsbotham, who wrote the foreword before the election result was known, warns the new government to learn from the lessons of the past as it goes about implementing financial cuts.

Mark Leech, the editor of the Prisons Handbook and founder of Unlock, a charity for former offenders, welcomed Ramsbotham's comments. "Targeting reoffending has got to be the cornerstone of the prison service," he said. "If a hospital discharged patients and 67% of them came back with exactly the same illness, we'd close down the hospital.""That 67% is concealing tens of thousands of innocent victims of crime. An essential part of prison service is punishment, but the pendulum has swung too far the other way."

"We're in a situation where in Pentonville and Wandsworth, governors have been caught out moving disruptive prisoners elsewhere. It's all about ticking boxes."

A report by the Prisons Inspectorate last year exposed how managers at Wandsorth and Pentonville agreed to swap "difficult" inmates to improve results during difficult inspections.